Burnham Team Confirms No New North Sea Licences, Signals 78% Tax Review

Q: With 80% of North Sea oil exported, how will new drilling actually lower your family's energy bills?

New North Sea drilling is unlikely to cut your family’s energy bills in any meaningful way. The main reason is that UK oil and gas prices are set by international markets, not by where the fuel is produced. Even if more oil is pumped from the North Sea, it is generally sold at world prices. A large share of North Sea oil is exported for refining, so extra production does not automatically stay in the UK or reach households more cheaply. That is why energy experts, including the International Energy Agency, have said new UK fields would do little for energy security and would not materially change oil and gas prices. Independent analysis has reached the same broad conclusion: more domestic drilling may slightly reduce import dependence, but it does not shield consumers from global price shocks. The timing also matters. New fields and licences take years, often decades, to move from approval to production. That makes them a poor tool for bringing down bills in the near term. In the case of Rosebank, the field is mostly oil, not gas, and household energy bills are more directly tied to gas and electricity prices. What new drilling can do is support some domestic supply, jobs and tax revenues during the transition, especially through existing fields and tie-backs. But if the policy goal is lower household bills, the stronger evidence points to insulating homes, expanding renewables, electrifying heating and transport, and reducing exposure to volatile global gas markets.

3 articles · Updated · bbc.co.uk · Jul 19

Lucy Powell said Andy Burnham will keep Labour’s 2024 pledge to issue no new North Sea oil and gas licences, while shifting to a more “pragmatic” tone that treats fossil fuels as part of the energy transition.
That leaves existing licences intact and points to closer work with industry, but stops short of any immediate approval for contentious projects such as Rosebank and Jackdaw.
Rosebank and Jackdaw still face renewed environmental scrutiny after a legal challenge, with consultations running until August and any attempt to fast-track them risking another court fight.
The bigger near-term lever may be the 78% Energy Profits Levy, which industry says has choked North Sea investment and which Burnham could revisit more easily than the manifesto ban on new licences.
How Burnham balances that tax, existing projects and Labour’s clean-energy goals will shape whether his first energy moves look symbolic or geared to reindustrialisation and jobs.